Apparently, the credit markets actually aren't dead, not quite anyway. There is still some money out there. Yesterday independent wireless carrier MetroPCS (NYSE:PCS, news, filings) announced they would try to raise $300M in bonds, offering more of their existing 9.25% senior debt at a discount. My first thought was "Good luck, you're gonna need it", but apparently I was wrong. Just 24 hours later, MetroPCS announced that they in fact will sell $550M of those bonds at $0.895, for an effective yield of 11.82%.
Now that's not cheap money, but it's a lot cheaper than I thought it would be. And the fact that they nearly doubled the amount so quickly implies that there is quite a bit of money out there in the credit markets that is looking for a home. Who bought these bonds? I'm actually quite curious who is putting this money to work. It's not as if MetroPCS has huge (public) plans right now for the money, they just mention the usual laundry list of possible uses ending in 'general corporate purposes'. I don't follow the company that closely yet, but they don't look like they *needed* to raise it.
I suppose that's why they can get it though, because they don't need it. It looks instead like an opportunistic cash move, which leads me to believe they are hoping to put it to use via M&A. Lots of cheap stuff out there right now... Maybe they will use it to take another crack at Leap Wireless (NASDAQ:LEAP, news, filings)?
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